Market Information Wednesday 8 April 2020

Saudi Arabia and Russia are discussing the terms of an agreement to curb oil production to mitigate the impact of the coronavirus. The two countries are close to an agreement according to delegates involved in the talks. The accord would reduce global output by about 10 million barrels a day. The OPEC+ alliance will hold a virtual meeting on Thursday to reach a final agreement.

The IMF wants to assist emerging economies and developing countries reduce their dollar deficits. “Our board is going to review a proposal in the next days on creating a short-term liquidity line that is exactly targeted to countries with strong fundamentals, strong macroeconomic fundamentals, that may be experiencing short-term liquidity constraint,” said IMF director Kristalina Georgieva in an online briefing. The proposal is a solution for countries that have insufficient collateral to participate in the US Federal Reserve program.

The meeting between European finance ministers has not led to a solution yet. The ministers met on Tuesday to discuss measures that can be taken to mitigate the economic impact of the corona virus. The ministers were asked to come up with a number of joint measures before the end of this week. After a brief interruption last night negotiating has restarted today. A number of EU countries including France, Spain and Italy are asking for “coronabonds” or “eurobonds” while an earlier possible agreement of 250 billion euros from the emergency fund ESM is now off the table.

The 6M Euribor increased with 3 basis points to -0.25% compared to previous business day. The 10Y Swap increased with 8 basis points to 0.06% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.